By Francis Ntow
Accra, March 24, GNA – The Institute of Economic Affairs (IEA) has urged the government to promptly reassess all agreements related to Ghana’s natural resources with the aim of maximizing the nation’s benefits from their extraction.
She stated that the evaluation must ensure the nation achieves a minimum return of 60 percent from its natural assets, valued at more than 10 trillion, to aid in the country’s economic shift and reduce its debt load.
Former Chief Justice and IEA Fellow, Justice Sophia Akuffo, addressed this topic during a press conference in Accra on Monday, focusing on “Optimizing the Benefits from Ghana’s Natural Resources.”
She expressed worries about the exploitation of Ghana’s natural resources over several years, due to concession leases that granted sole control to international companies. These entities retained an unfairly large share of the goods and paid minimal sums as royalties and taxes.
The natural resources encompass gold, diamonds, bauxite, iron ore, petroleum, natural gas, cocoa, and timber.
She requested the government to take cues from the United Kingdom (UK), Australia, Qatar, Tanzania, Botswana, Angola, and Eritrea, who examined their mining legislation and agreements to secure up to 50 percent for their national interests.
For instance, in Angola, the Petroleum Income Tax operates under a Production Sharing Agreement with a tax rate of 50% for taxable income. However, operations conducted through different contractual arrangements like consortium agreements face a higher tax rate of 65.75%, according to Justice Akuffo.
The ex-Chief Justice mentioned the UK as an example, where they had a separate corporate tax rate of 30 percent, an additional charge of 10 percent, and a levy of 38 percent on the extraction and production of oil and natural gas.
Likewise, according to Article 41 of Eritrea’s Mining Law Proclamation, the government was permitted to hold an equity stake of up to 40 percent in total, which includes a mandatory participatory interest of 10 percent in any mining venture.
“The moment has arrived for Ghana to terminate its Guggisberg-style agreements that favor international corporations and instead embrace contemporary optimal methods, ensuring that a greater portion of the resource revenue benefits the nation rather than solely foreign mining enterprises,” she stated.
She requested the establishment of a five-person panel consisting of seasoned Ghanaian individuals to examine and suggest revisions to every law and contract related to natural resources. This was aimed at maximizing the advantages these resources could bring to the nation.
The former Chief Justice suggested that Ghana should fully embrace domestically-owned production lines or, at minimum, establish joint ventures between Ghanaians and foreigners in the natural resources sector, which would involve cost-sharing and profit distribution.
Dr. John Kwakye, the Director of Research at IEA, remarked, “Although our nation boasts abundant wealth beneath the soil, it appears impoverished above ground.” He further stated that leaders have not sufficiently leveraged the country’s natural resources to foster national progress.
“More than 10 trillion dollars worth of natural resources could potentially be harnessed if appropriate systems are in place… If you’re unprepared, keep them underground until the necessary expertise and funding become available,” he stated.
Should it require street protests to prompt the government into favoring Ghanaian interests in natural resource agreements, the IAE will be at the forefront.
Dr. Kwabena Nyarko Otoo, the Deputy Secretary General of the Trades Union Congress (TUC), has called upon the government to boldly reassess all laws and agreements to ensure they benefit the nation.
He committed TUC to ongoing collaboration with the IEA and other partners in developing policies aimed at ensuring appropriate changes in foreign ownership and control of Ghana’s natural resources.
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